Tuesday, October 21, 2014

Mobile network operators missing A2P SMS opportunity

MUNICH, GERMANY: New global research from analyst house mobilesquared, sponsored by mobile interaction specialist tyntec, highlights that four in five (81 percent) mobile network operators (MNOs) cite decreasing revenues on traditional telecom offerings such as P2P (Person-to-Person) SMS as their most pressing concern.

The survey of more than 50 international MNOs showed that one in three (32 per cent) respondents have seen a reduction in P2P traffic over the last 12 months whilst half (50 percent) who have seen an increase in Application-to-Person (A2P) messaging. One in three MNOs (32 percent) reported at least a 6 percent growth in A2P traffic over the last year while - in contrast - almost one in five MNOs (18 percent) have seen P2P traffic decline by more than 5 percent.

This clearly indicates growth in the A2P sector but, given the difference in scale between P2P and A2P, greater focus will be needed on driving growth and monetisation if A2P messaging is to fill the revenue gap left by the decline of P2P SMS.

A2P SMS is a crucial revenue opportunity for mobile network operators. Worldwide A2P messages are expected to increase to 2.19 trillion by 2018 and A2P revenues will grow to $60 billion by 2018.

The decline of P2P SMS is being attributed to the surge in over-the-top (OTT) services like WhatsApp, Skype and Facebook Messenger. The latest research by mobilesquared reveals uptake of these services is rising rapidly, with half of MNOs (50 percent) expecting at least half (50 percent) of their customers to be using OTT services in 2015.

In relation to previous research by mobilesquared, this compares to one in five MNOs (21 percent) projecting the same level of usage in 2013 for the year ahead and none projecting a comparative level of usage in 2012 for 2013.
Utilising A2P SMS has been a challenge for network operators as the technology has previously been inundated with spam. Recently, it has emerged as an attractive revenue stream following demand for high-quality traffic by enterprises and OTT players.

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